Judge
throws out Pickett verdict
Publication Date: 04/24/04
Cady said Judge Lyle E. Strom overturned the verdict based on technicalities
and not the finding that captive supplies harm prices.
David A Domina, an
Domina said Strom found that the plaintiffs' proof of damages was not
sufficient and the cattlemen did not disprove all Tyson's claimed
justifications for use of captive supplies or long-term contracts to acquire
cattle for slaughter. He said cattlemen claim those contracts are used to
manipulate market prices.
He said appeal papers will be filed immediately. The case will be reviewed
by the U.S. Court of Appeals for the 11th Circuit in
"We are deeply disappointed with the court's ruling today, and will
immediately ask the court of appeals to review the matter," Domina said.
He said the plaintiffs remain confident that they will prevail in the end.
"People in the industry know what has happened to our cattlemen, and
why," Domina said. "The jury could see it, and we are optimistic the
appellate court will, too."
The case went to trial on Jan. 12 and the jury reached its verdict in favor
of the plaintiffs on Feb. 17 after a four-week trial.
Last month, the federal judge presiding over the Alabama-based class-action
lawsuit against Tyson denied the plaintiffs' motion to enter a $1.2 billion
judgment against the company.
Cady said Strom on Friday left intact the finding that captive supplies harmed
all cash sellers of fed cattle to Tyson in the amount of nearly $1.3 billion.
The court also left intact the finding by the jury that the market for fed
cattle is national.
But Cady said the court found that there were legitimate business reasons
for captive supply, including that Tyson was guaranteed a consistent, reliable
supply of cattle and that Tyson needed captive supplies to meet the competition
where other packers engaged in the practice.
Tyson Fresh Meats is a subsidiary of Tyson Foods Inc., an Arkansas-based
company that is the world's largest processor and marketer of chicken and red
meat products. The company operates a number of beef processing plants in
In responding to Friday's announcement, Tyson Chairman, John Tyson, said the
decision was a victory for both the company and cattlemen across the country.
"It protects the freedom of producers to market cattle the way they
want, and it affirms our strongly held belief that our livestock practices are
proper," Tyson said.
Fred Stokes,
He said the court did not dispute the fact that the practice harms cattle
producers.
"It also did not dispute the fact that cattle quality was lower with
captive supply cattle and higher with spot market cattle," Stokes said.
"We think that the jury verdict is entitled to far more respect by the
judiciary."
The court's finding on legitimate business expectations turned on a dispute
of law, Stokes said. He said the plaintiffs argued that where the harm of
captive supply outweighs any claimed benefits, the court should find the
practice unlawful.
Also, the court accepted the defendant's argument that even if the harm was
severe, if there is any benefit at all, the law was not broken.
"It is not logical that where, for example, there is $100 of harm by
Tyson, proof of a $1 benefit makes the net of $99 harm to producers go
away," he said. "Tyson was not able to quantify any benefit received
by captive supply in dollar terms. They merely made assertions. Further, it is
outlandish that Tyson should be allowed to use strategic price manipulation
strategies just because other dominant packers are doing it."
Stokes said the court additionally held that there was no proof that persons
who sold cattle in 1999 and 2000 were harmed.
"We are unsure how the court could find no proof of harm in 1999 and
2000 where captive supplies were going up rapidly when the court accepted that
captive supplies lowered prices in all other portions of the eight-year class
period," he said. "It just does not make any sense and does a
disservice to cattle producers wanting a fair price."
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